Lady Money

Tips in Ten - Overcoming Money Disempowerment

Episode Summary

This episode is about financial empowerment. Women are set up to under-achieve when it comes to managing money. We’ll be discussing: • Why is money such an “issue” for women? Women have inherited a disengagement with money. It just seems safer to avoid it! • Is society partially to blame for gender wealth inequality? Society continues to reinforce the view that men and women have different roles when it comes to money. • Why is addressing lack of confidence a good starting point? The legacy of disempowerment is a key reason why confident women struggle to be confident with money. • Embracing the reciprocal nature of money leads to positive change It is not just about accumulating wealth. Financial control actually allows you to give and invest more.

Episode Notes

Host – Teresa Mitchell, CFP teresa@lady-money.com

In my 20 years in the industry, I have had over a thousand conversations with women who have not felt they have reached their financial potential – usually in the areas of investing and subsequent financial security. I have found the key to moving forward from the image of bag lady to empowered lady is having a different kind of conversation with women than they usually experience with a financial advisor. It is about focusing more deeply on what matters in terms of family, community and life purpose. Approaching the conversation with compassion and a goal of honest, authentic connection creates a sense of trust that makes financial education and taking investment action not only possible but desirable.

To that end I left my longtime wealth management firm and am launching a personal financial coaching platform -- LADY MONEY, LLC. It is intended to help women achieve a sense of financial wellbeing around investing for retirement that imparts peace of mind and ultimately leads to financial security.

Resources – 

Financial Issues – 

https://www.gobankingrates.com/money/financial-planning/financial-issues-only-women-face/

Financial Disempowerment – 

https://www.ubs.com/us/en/wealth-management/specialized-advice/women-and-finances.html

https://www.nerdwallet.com/article/investing/survey-less-than-half-of-women-in-u-s-invest-in-the-stock-market

Lack of Confidence --

https://www.ally.com/do-it-right/money/money-opportunities-and-challenges-that-females-face/

https://www.td.com/us/en/investing/insights/womenomics/

Money Beliefs –

https://s3.amazonaws.com/kajabi-storefronts-production/sites/88071/themes/1463604/downloads/fkKzwXp4TnikniUdVLl8_How_clients_money_scripts_predict_their_financial_behaviors-_Journal_of_Financial_Planning-_2012.pdf

Episode Transcription

Teresa Mitchell, CFP: Values and money don't mix, or do they? Join me, financial coach, Teresa Mitchell to find out. Let's explore how women can make money while making a difference. This is Lady Money!

Welcome! Please join me for Lady Money Tips in Ten.

In my podcast interview with Heather Picard – “An Abundant Mindset”, she pointed out “it’s collective as women, we've inherited a legacy of disempowerment around our money”. I want to explore this topic of disempowerment because it not only leads to a gender wealth gap but limits the potential of women to make a difference in our society. Something most of us value deeply.

Why is money such an “issue” for women? Half of married women defer to their partners on long-term financial decisions. Unfortunately, 54% of millennials defer so women’s relationship with money isn’t moving in the right direction. And while part of this pattern is reinforced by role models some of the problem is gender headwinds. The gender pay gap is one of the biggest obstacles. Women have historically been paid less. Currently it is 82 cents to the dollar. I guess once upon a time financial patriarchy made sense. For a brief period, the woman tended the home fires, and the man was the breadwinner.  But those days are long gone. So why haven’t women caught up?

• Because women don’t ask for more money -- Women need to learn how to negotiate. In many cases, no one is going to pay you more unless you ask.
• We don’t talk about money – Progress is going to be limited as long as the topic of money is a social taboo. Break the stranglehold by talking to your friends more candidly about personal finances.
• Women save rather than invest – The gender wealth gap is more important than the gender pay gap. Why? Because financial security is all about what you save and invest during the working years and what you spend in retirement. 

Is society partially to blame for gender wealth inequality? Women were taught that it is the man’s job to handle the family finances. Today it seems almost an unconscious belief even if there isn’t a partner in the picture! But disengagement leads to disempowerment. So why is this behavior a continuing trend?

• Lack of women in the C-Suite – Women aren’t even on the right path with careers that dead-end in marketing or human relations. Climbing higher up the corporate food chain equals more knowledge, more money and a higher tolerance for risk. And investing is all about the relationship between risk and reward.
• Gender socialization limitations – To a large part gender is learned through socialization. Men are taught to be powerful, autonomous and assertive. Women are taught to be accommodating, put others needs before their own and to avoid conflict. Since the prevailing social viewpoint is money = power you can see the dilemma women are in (i.e., earning power).
• The “Pink Tax” – There is a documented markup on certain products marketed to women. Think of beauty products, haircuts, clothing and children’s toys among others. So, women make less and pay more. No wonder there is little left to save much less invest!

Why is addressing lack of confidence a good starting point? Boys and girls don’t get the same lessons about money. Girls seem to learn about budgeting and bookkeeping while a boy’s parental education is more around credit cards, taxes and investing. This leaves us with both men and women feeling confident about day-to-day financial tasks but half of women feeling unsure of themselves when it comes to managing investments. 

• Taming the math demon – It’s getting better, but women still have a thing about the STEM skills... particularly M-MATH. But the unsung little secret is that you don’t need to be a mathematical genius to invest. Investing seems overwhelmingly complicated but in reality, it is really quite simple. You just need some basic education and the right guide.
• Take charge sooner rather than later – Women “control” over half the wealth in this country today. We are poised to manage nearly two thirds as the baby boomer generation divests itself. So, isn’t it better to figure out how to take financial control now?!
• Embrace values-aligned investing – ESG (Environmental, Social, Governance) investing has been a star during the pandemic and women are a lot of the reason why. We discussed earlier that women are brought up to put family and community first. So, values-aligned investing is the perfect vehicle. Today women can make money and make a difference.

Does embracing the reciprocal nature of money lead to positive change? Hoarding is actually a negative “money attitude” some people form in early childhood. It comes from a mistaken perspective many of us have that money can buy happiness. But we make our relationship with money unnecessarily complicated. 

• Money is like water – In the Lady Money podcast “An Abundant Mindset” my guest mentions an interesting analogy made by visionary and author Lynn Twist. She said -- if you begin to think of money like water, the flow of giving and receiving changes to empowerment. Money is the tool, the vehicle for exchanging what we want or need. Somewhere along the line money has come to symbolize something that it isn’t and can never be.              
• Money and values do mix but not in equal parts – The Lady Money Podcast tag line is “money and values do mix”. But not in the way that you might think. My argument with most women is that they disregard money – for a number of reasons -- but that doesn’t really matter. My point is – having financial control is what allows women to live purposeful lives. It is money that gives women the freedom to put the “interests of others first”.

In closing, I would like you to think of money as an enabler. If you have lived long enough, you will probably agree that you can define a good life by two things – relationships and purpose. But without money life becomes simply a struggle. When we let money flow both in and out the empowerment comes from the freedom to live our lives with deep meaning and connection.  

TIPS OUTRO:       
Thanks so much for listening! I hope you found Lady Money – Tips in Ten, helpful. If you have any questions, you would like me to address,or if you want more information on the Lady Money financial coaching program or blog, check out the show notes. Or you can reach me at the email address, teresa@lady-money.com. 

Until next time, this has been Lady Money – where money and values do mix.